Schlumberger Posts Loss on Weak Oil Prices, Hurricane Disruption

Schlumberger posts a third-quarter loss and lower-than-expected revenue as weaker oil prices and 'hurricane disruption' continue to impact the oil-exploration sector.

Schlumberger  (SLB) - Get Report on Friday posted a third-quarter loss and lower-than-expected revenue as weaker oil prices amid the ongoing coronavirus pandemic and hurricane disruptions continued to impact the oil-exploration sector.

The Houston-based company posted a third-quarter loss of $82 million, or 6 cents a share, vs. a loss of $11.3 billion, or $8.22 a share, in the comparable year-earlier period. Excluding charges and credits, the company earned 16 cents a share, down from 43 cents a share a year ago though better than analysts' estimates of 13 cents a share.

Revenue came in at $5.3 billion, down 38% from $8.54 billion a year ago and below analysts’ forecasts of $5.4 billion. Cash flow from operations was $479 million, while free cash flow was $226 million.

The lower results were fueled by a drop in the company's U.S. offshore rig activity resulting from "lower multi-client seismic license sales and hurricane disruption," Schlumberger said.

At the same time, CEO Olivier Le Peuch said Schlumberger’s focus on “capital discipline” as well as cost efficiencies and technology innovation helped offset general volatility in oil markets resulting inclement weather, the pandemic and lack of demand.

Specifically, Le Peuch pointed to two milestones achieved during the quarter: An agreement to combine its "OneStim" pressure pumping business with Liberty Oilfield Services  (LBRT) - Get Report, and an agreement to divest its low-flow artificial lift business in a cash transaction.

While the company didn't provide fourth-quarter estimates, Le Peuch noted that Schlumberger expects to continue to benefit from its “disciplined” approach in North America and the broad strength of its international business.

Still, “… while the global lockdowns are evolving and vaccine development is progressing, the near-term recovery remains fragile owing to potential subsequent waves of Covid-19 that could pose a significant risk to this outlook.”

Separately, Schlumberger said it approved a quarterly cash dividend of 12.5 cents a share.

Shares of Schlumberger were down 4.14% at $15.74  in trading on Friday.